I'm a San Francisco-based reporter for Forbes' tech team. I cover technology news and write about how tech affects the people who create it, use it or live in a place full of it. Before Forbes, I covered tech culture for the San Francisco Chronicle and cut my teeth as a breaking news and crime reporter. Feel free to follow me on Twitter at @ellenhuet or send me tips, story ideas and feedback at ehuet [at] forbes.com

The California Public Utilities Commission warned Uber, Lyft, Sidecar and other car app companies in a stern letter this week that they are not allowed to take riders to or from any airport in the state. They have two weeks to comply. After that, any company whose drivers are spotted picking up or dropping off passengers at an airport could lose its permit and be shut down in California.

The feud between airports — especially San Francisco International — and companies like Uber, Lyft and Sidecar is as old as the companies themselves. Riders, now accustomed to booking rides through an app to get around a city, want to be able to get to or from an airport in the same way. But airports already have strict structures that regulate how taxis and other rides for hire pick up fares on airport property.

That has led to butting heads. In September, Califoria regulators completely forbid airport operations, saying companies “shall not conduct any operations on the property of or into any airport unless such operations are authorized by the airport authority involved.”

Drivers took fares to and from airports anyway. Last fall, SFO officials began issuing citizens arrests for drivers they found working at the airport.

The warning letter hasn’t stopped them: Uber blocks UberX cars from appearing on the app while on airport property, but on Thursday morning they were all waiting just outside to be summoned in. Lyft drivers are also shown on the app dropping off and picking up passengers.

In April, things started to get petty. SFO gave the companies permit applications — but refused to meet with them to discuss them, the companies said. The proposed permit would only allow Uber, Lyft and others to drop passengers off at the airport, not pick them up, as taxis are allowed to do.

The proposed permit also asks that drivers pay a $3.75 fee per trip. Taxis currently pay $4 to enter airport property, said airport spokesman Doug Yakel. None of the car service app companies has applied for a permit except Wingz, Yakel said.

In May, airport director John Martin declared the companies were operating illegally on airport property. The companies, in turn, sent a letter complaining about the lack of communication with the airport — but sent it to San Francisco Mayor Ed Lee, not to Martin.

Martin slammed back, saying the companies did meet with the airport. He also said that some drivers that authorities stop at the airport don’t have proof of insurance or valid driver’s licenses.

“In the past few weeks the SFPD Airport Bureau has cited three TNC [Transportation Network Company] drivers for no proof of insurance, two for improper display of license plate, three for no registration, and two for no driver’s license,” Martin wrote.

So then Martin took it a level higher. State regulators, who oversee the car service companies, met with airport officials last week. Wednesday’s letter was the result, and it didn’t mince words.

“I would like to express my personal disappointment and concern about this behavior,” CPUC president Michael Peevey scolded in the letter.

The warning letter hasn’t stopped the companies: On Thursday morning, numerous UberX and Lyft drivers floated in or near SFO. A Sidecar spokeswoman said the company has always told drivers not to take airport fares and is reminding drivers again Thursday.

The letter says that 70 out of 300 drivers stopped at SFO in recent months — most of whom were UberX drivers — did not have “trade dress” on their cars, and numerous drivers did not have proof of insurance. Most drivers, when asked, said they did not know they were not allowed to work at the airport.

But Uber blocks UberX drivers from showing up on their app when they are on airport property, Uber spokesman Lane Kasselman confirmed, so drivers must know there’s a change in rules at the airport. And while that move may stop UberX drivers from waiting within SFO for their next ride, a quick glance at the app shows drivers lingering just outside, knowing their turn will come. Who says regulation stifled innovation?

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What do taxicabs expect? Their service hasn’t changed or gotten better in years. I’m surprised it took as long as it did for ride-sharing companies to take the spotlight. While I agree that the legality is in a gray area, I think its only because the laws can’t change fast enough for these revolutionary, innovative companies. To read more about Lyft and Uber, visit http://www.lyftvsuber.com/. The website has referral links to $25 FREE RIDE CREDIT to new passengers and SIGN-UP BONUSES for new drivers (drivers can make upwards of $35/hr – honestly). Ride-sharing services are affordable, fun, safe, and just make sense. I hope the laws can catch up!

I think the overall concept of ride sharing is a good one but, these companies have not thought their business model through enough in my opinion. I think here they are running up against cab companies who all have to pay a premium tax for the privilege of picking up passengers from the airports in California. The bigger issue is one of adequate liability insurance coverage which, in my opinion, will be their ultimate “undoing” as claims begin to come in for everything from assault by drivers to auto accident personal injury claims.

Their business model is just fine, it’s just the fact that ridesharing is such a new and informative method of transportation there are a lot of kinks to be worked out.

I am working on a podcast about the insurance aspects of TNC’s and I think their policy is surprisingly adequate. There is a gap when you don’t have a passenger but for now personal insurance covers that as long as you don’t blab to your insurance that you’re a TNC driver :)

Well it is a big deal bc insurance companies don’t want to hand out personal policies to people who use their cars for rideshare. By nature, rideshare drivers are on the road more often and thus more likely to get into an accident.

I just did a podcast that goes into detail on the insurance aspect of rideshare: http://therideshareguy.com/the-rideshare-guy-podcast-episode-2-everything-you-need-to-know-about-uber-lyft-and-sidecars-insurance-policies/

In pretty much every city across the nation, any issues with Uber, Lyft, Sidecar etc. can simply be boiled down to money. Someone or some entity feels threatened they will lose or not capture money. Same issue with AirBnB. Sure it will be under the guise of “protecting consumers and their safety” but I can assure you it’s all about money. You can attempt to stifle innovation and evolution of a service but you can’t stop it forever. Embrace the changing ways of doing business or risk being left behind. SFO has an opportunity here to be a trendsetter, but so far only portrays itself as a grumpy old man unwilling to change. In my opinion, San Fran has always been a progressive city known to embrace technology and it’s applications to everyday life. I hope that continues to be the case….

I don’t get it. How can they stop people using TNCs to get dropped off or picked up at airports (or wait in a cell phone lot)? They can simply get in line with other people being dropped off or picked up by friends/family members. Why would they need to join the cab line if they are driving a regular car indistinguishable from all others?

I think airport officials are on the lookout for people who might have the phones mounted on the inside of windshields, as many drivers do. Or they might have other ways to look for TNC drivers picking up or dropping people off at the airport.